26/09/2011 18:30 BST | Updated 26/11/2011 05:12 GMT

Capping Tuition Fees Would Benefit Government, Not Students, Think Tank Says

Labour's pledge to lower the cap on tuition fees to £6,000 is more likely to benefit the Government than students, a think tank claims.

Ed Miliband made the announcement, which would see the maximum charge cut by £3,000, on the eve of the Labour Party conference in Liverpool.

The Opposition leader said the £1 billion move would be funded by charging high-earning graduates more interest on their student loans and ditching the Government's planned cut in corporation tax.

Under reforms put forward by the coalition administration and agreed by Parliament last December, English universities can charge up to £9,000 in tuition fees from next year.

Graduates will begin paying back their loans once they are earning over £21,000, with any unpaid debt written off after 30 years.

The CentreForum report analysed Labour's announcement against the new fee regime, which will see fees average £8,393 next year.

It concludes that Labour's proposal is unlikely to help the majority of students.

It says that under Labour's plan graduates will not pay back less each month as monthly repayments are linked to income, not the level of debt.

Instead, it just means that graduates are likely to pay back their loans quicker.

The report says that some students that would have repaid their loans anyway with fees of up to £9,000 will just repay the money earlier while other students that would not have repaid in full with fees at a maximum of £9,000 will now repay it.